Personal income taxes: gross income exclusion: qualified principal residence indebtedness.

The Personal Income Tax Law provides for modified conformity to specified provisions of federal income tax law relating to an exclusion of the amount of the discharge of qualified principal residence indebtedness, as defined, from an individual's gross income if that debt is discharged after January 1, 2007, and before January 1, 2014, as provided. The federal income tax law allows this exclusion for qualified principal residence indebtedness that is discharged before January 1, 2017, or is subject to an arrangement that is entered into and evidenced in writing before January 1, 2017. This bill would extend this state tax exclusion to qualified principal residence indebtedness that is discharged before January 1, 2017, or subject to an arrangement that is entered into and evidenced in writing before January 1, 2017, and would also apply this exclusion retroactively to discharges of indebtedness that occurred on or after January 1, 2014, and before January 1, 2016. The bill would also provide that no penalties or interest with respect to the discharge of qualified principal residence indebtedness during the 2014 and 2015 taxable years would be due, and would make legislative findings and declarations regarding the public purpose served by the bill.